FCC Chairman to Seek New Net Neutrality Rules

FCC chairman Tom Wheeler on Wednesday said that he would seek new rules of the road for the Internet, after an appellate court last month overturned major provisions that prevent Internet providers from blocking or discriminating against certain types of web traffic.

Wheeler will open new proceedings to develop such net neutrality rules that require web traffic to be treated equally, preventing blocking or discrimination that would limit the reach of certain types of content. In what could be a lengthy process, a docket will be opened where the public can comment on net neutrality and the D.C. Circuit Court of Appeals’ opinion.

But a question is how the FCC will find legal authority to impose such regulations. The DC Circuit found fault with the agency’s regulation because they were passed without actually classifying the Internet as a “common carrier,” akin to the way that it oversees utilities like phone service.

An FCC official said that they took the DC Circuit decision as an “invitation” to rewrite rules based on another route, a provision of the 1996 Telecommunications Act that says that the agency has authority to promote broadband deployment and ensure competition in the marketplace. The D.C. Circuit, while finding fault with the way that the FCC imposed the rules, nevertheless cited that 1996 provision, leading observers to suggest that it would be a way for the agency to proceed on firmer legal footing.

A possibility is that the new net neutrality would be written in a similar way that the agency wrote its data roaming rules, which have withstood legal scrutiny. Such rules provide more flexibility for telecom companies in negotiations in how they treat wireless traffic, but still leave a role for the agency in monitoring anticompetitive behavior.

Meanwhile, Wheeler said that the FCC would not appeal the D.C. Circuit’s ruling.

Public interest groups have been pressing the FCC to classify the Internet as a “common carrier” service, something that is called “Title II” authority in regulatory parlance. Such a move would certainly put the FCC on solid legal footing, but it is viewed as politically untenable, as Wall Street and congressional Republicans have warned that it would slow the development of broadband with a wave of new regulation.

Nevertheless, an FCC official said that such a reclassification would continue to remain an option.

“In its Verizon v. FCC decision, the United States Court of Appeals for the District of Columbia Circuit invited the Commission to act to preserve a free and open Internet,” Wheeler said in a statement. “I intend to accept that invitation by proposing rules that will meet the court’s test for preventing improper blocking of and discrimination among Internet traffic, ensuring genuine transparency in how Internet Service Providers manage traffic, and enhancing competition.”

Wheeler said that he also would seek to “enhance” the FCC’s transparency rule, which the D.C. Circuit upheld. That rule requires Internet providers to provide some disclosure as to how they manage web traffic.

He also noted that, as the FCC devises new rules, major ISPs had indicated that they would continue to honor the net neutrality, and “we will take them up on their commitment.”

Michael Powell, CEO of the National Cable and Telecommunications Assn., said that the cable industry “has always embraced the principles of an open Internet and remain committed to them.

“We look forward to working with Chairman Wheeler and the Commission on ensuring that American consumers will continue to enjoy a fast, robust and open Internet experience. We continue to believe that the values of an open Internet can be preserved, while avoiding a damaging move to heavier regulation.”

Wheeler’s decision to proceed with a rewrite also comes as the FCC will weigh whether to approve the merger of Comcast, the country’s largest Internet provider, with Time Warner Cable. The impact of such a combination on net neutrality is expected to be a part of commissioners’ consideration of whether to approve the deal.

Comcast exec VP David Cohen said that “with the direction announced today, FCC Chairman Wheeler has taken a thoughtful approach which creates a path for enforceable rules based on the appropriate authority outlined by the court’s findings.” Comcast has to abide by the net neutrality rules, regardless of the D.C. Circuit ruling, until 2018. That was among the conditions it agreed to as part of its acquisition of NBCUniversal in 2011.

Wheeler said that the FCC also will explore ways to build competition, and study whether legal restrictions can be lifted so that cities and towns could offer their own Internet service to consumers.

“The FCC must stand strongly behind its responsibility to oversee the public interest standard and ensure that the Internet remains open and fair,” Wheeler said. “The Internet is and must remain the greatest engine of free expression, innovation, economic growth, and opportunity the world has ever known. We must preserve and promote the Internet.”

His announcement is likely to trigger months of debate over how the new rules should be written. When his predecessor, Julius Genachowski, sought net neutrality regulation in 2009, the lobbying among various interest groups lasted for more than a year, ending in a set of rules that were designed as a compromise.

On Wednesday, it looked again like the debate would see some pushing for strong, concrete regulations and others advocating a light regulatory touch.

The Writers Guild of America West said that they were “pleased the chairman is moving to protect an open Internet.

“Having faced the detrimental effects of years of media consolidation, film, television, and new media writers fully understand the importance of allowing the public to easily view their works through an open Internet.” They added that Comcast’s proposed acquisition of Time Warner Cable makes it “vital” that the FCC “acts quickly.”

Rashad Robinson of the civil rights organization Color of Change said that the FCC has “the power to take decisive action now to protect the public and restore the free and open Internet. Any plan that does not include reclassification allows corporate gatekeepers like Comcast and Verizon to block, slow down and choose which voices and viewpoints are heard.”

Some public interest groups, like Public Knowledge and Free Press, expressed skepticism that the route the FCC is taking will still result in rules that have teeth, or whether they would act as vague guidelines for ISPs to follow.

Less supportive of Wheeler’s approach were two key lawmakers, Rep. Fred Upton (R-Mich.), chairman of the House Energy and Commerce Committee, and Rep. Greg Walden (R-Ore.), chairman of the Commerce communications and technology subcommittee. In a statement, they said that “no matter how many times the court says ‘no,’ the Obama administration refuses to abandon its furious pursuit of these harmful policies to put government in charge of the web. These regulations are a solution in search of a problem, and with the many issues on its plate, including implementation of the spectrum incentive auctions, it would be wise for the commission to focus on fostering economic growth, job creation, and competition.”

FCC commissioner Ajit Pai said that Wheeler’s plan “reminds me of the movie ‘Groundhog Day.’ In the wake of a court defeat, an FCC Chairman floats a plan for rules regulating Internet service providers’ network management practices instead of seeking guidance from Congress, all while the specter of Title II reclassification hovers ominously in the background. I am skeptical that this effort will end any differently from the last.”